adverse selection definition

adverse selection

Insurance firm's acceptance of applicants who are uninsurable (or at a greater than normal risk), but conceal or falsify information about their actual condition or situation. Approval of their application has an 'adverse' effect on insurance companies, because normal insurance premiums are computed on the basis of policyholders being in average good health and employed in non-hazardous environments. Also called antiselection.

adverse selection is in the Disaster Planning & Risk Management and General, Marine, & Life Insurance subjects.

adverse selection appears in the definitions of the following terms: antiselection and suicide clause

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